Stimulus Funds Huge West Texas Wind Farm Joint-Venture with Chinese Company

Posted on November 2, 2009. Filed under: News | Tags: , , , , , , , , |

Last week, Green Inc announced a planned 600 MW wind farm to begin construction by 2010 in West Texas. The project is a joint venture involving A-Power Energy Generation Services, a Chinese wind turbine manufacturer; Renewable Energy Group,  a US Investment firm; and the Texas based Cielo Wind Power. With the support of US government stimulus incentives including cash grants and loan guarantees, Chinese banks will finance a large percentage of the $1.5 billion project.

The 240 wind turbines required for the farm will be made in Shenyang, China in the first example of Chinese exporting turbines to the United States. John Lin, CEO of A- Power Energy Generation Systems,

“This wind farm project came about thanks to the openness of the United States for investments in the field of renewable energy”

Interestingly, a follow up from Green Inc. yesterday showed that not everyone in the US is that open to Chinese involvement in this project. Many readers and observers were unhappy to see US stimulus money going to Chinese companies. Though, the project would create 300 construction jobs in the US, only 30 of these would be permanent. And, this pales in comparison to the 2,000 Chinese jobs created by the project.

“Why are U.S. stimulus funds being used to subsidize manufacturing jobs in China?”

Asked a reader that was perplexed by how US government officials could keep making statements about the threat of US losing its competitiveness in the clean energy field to Chinese companies, and at the time is making a huge stimulus investment that seems to benefit these same companies.

According to a recent study by the Investigative Reporting Project at American University School of Communication,

“84 percent of the $1.05 billion in clean-energy grants distributed by the government since Sept. 1 has gone to foreign renewable energy companies — specifically, wind companies”

Russ Choma, an author of the study explains that much of the investment for wind power has gone to European companies, because the American wind energy manufacturing base lags far behind that of Europe.

Several other factors account for the negative reaction to Chinese investment in the West Texas wind project. First, China’s is know for practicing “green protectionism” by enforcing local content provisions on clean technologies to boost domestic production. At a recent US-China summit, the China agreed to lift the restrictions on wind turbines.

Second, China is already dominating the solar industry and exports 95% of its products to the US and Europe, giving US producers a run for their money as they try to compete with the low Chinese solar panel prices.

Finally, China tends to make Americans (or at least a subset of them) nervous. In many industries, Chinese manufacturers are the toughest competitors. And don’t forget about that huge bilateral trade deficit. So the strong reaction to this latest announcement is no surprise.

And there are some difficult questions posed for even the biggest China fans. Should US stimulus money really be spent to create jobs in China? How will the US stay competitive in the future without making significant domestic  investments in new industries like wind turbine manufacturing? Still, US-China cooperation is key to crafting a global climate change treaty and plan, and though it may be a leap of faith, isn’t a joint venture like this a useful way to get the ball rolling?

Here’s a follow up post from Green Inc, with comments from US Renewable Energy Group’s, CEO Cappy McGarr (is that a great name or what?) He argues that the project’s positive impact on US jobs will be much larger than originally outlined.


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[…] | Tags: china, clean technology, jobs, News, Senator Schumer, wind energy | In a follow up to the recent controversy around the proposed Texas wind farm. The issue was that a Chinese company (A-Power Generation […]

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